AllianceBernstein (AB) Q3 2024 earnings summary

Executive summary

• Achieved third consecutive quarter of positive net inflows and organic AUM growth, reaching $806 billion, led by strong retail fixed income demand and private markets expansion.

• Adjusted operating margin rose to 31.3%, up 330 bps year-over-year, with further margin expansion expected from NYC office relocation.

• Private markets AUM reached $68 billion, up 11% year-over-year, with over $1 billion in alternative net fundings and new product launches.

• Fee rate stabilized at 39.9 bps, with base management fees growing in line with AUM.

• Completed deconsolidation of Bernstein Research Services after joint venture with Societe Generale.

Financial highlights

• End of period AUM was $805.9 billion, up from $669.0 billion a year ago and $769.5 billion last quarter.

• Adjusted earnings per unit was $0.77, up 19% year-over-year; GAAP diluted net income per unit was $1.12, up 124%.

• Net revenues (GAAP) were $1.09 billion, up 5% year-over-year; adjusted net revenues were $845 million, flat year-over-year.

• Adjusted operating income was $264 million, up 12% year-over-year; adjusted operating margin at 31.3%.

• Compensation ratio improved to 48% of adjusted net revenues, down from 49.5% prior year.

Outlook and guidance

• FY24 performance fee guidance tightened to $145–$155 million, with private markets expected to contribute over two-thirds.

• Baseline adjusted operating margin for FY25 projected at 33%, assuming neutral markets.

• Full-year 2024 G&A expenses expected to decline mid- to high single digits year-over-year.

• Effective tax rate guidance for 2024 lowered to 5–6%.

• Targeting $90–$100 billion in private markets AUM by 2027, aiming for 20%+ of asset management revenues.